Nike agrees to help displaced Honduran workers

MADISON (AP) -- In a move praised by labor activists, Nike Inc., agreed Monday to spend $1.5 million to help workers abruptly laid off last year by two subcontractors in Honduras.

The announcement comes after the University of Wisconsin-Madison in April became the first school to cancel its licensing agreement with Nike to protest the plight of the workers, who were owed millions of dollars in severance pay.

UW-Madison and its labor monitoring group, the Workers Rights Consortium, praised the announcement Monday. They said the case could set a precedent for the apparel industry that will make companies responsible for the actions of subcontractors.

Under the agreement, Nike will pay $1.54 million toward a relief fund for roughly 1,500 workers. The company will also enroll the workers in the country's national health insurance program for a year, and give them preference for openings at other Honduran subcontractors.